1993 (5) TMI 67 - AT - Income Tax

Denial of Deductions Upheld for Failure to File Audit Report

The Tribunal upheld the denial of deductions under section 80HHA to the assessee for failure to file the Audit report along with the return of income, ... Industrial Undertaking, Profits And Gains Issues:1. Dispute over denial of deductions under section 80HHA due to non-filing of Audit report along with the return of income.2. Interpretation of statutory provisions regarding mandatory filing of Audit report under section 80HHA.3. Comparison with other case laws and precedents to support arguments for and against the assessee's position.Analysis:1. The primary issue in this appeal was the denial of deductions under section 80HHA to the assessee because the Audit report was not filed along with the return of income. The lower authorities had disallowed the benefit citing non-compliance with statutory provisions. The counsel for the assessee acknowledged similar denials in previous years and presented arguments based on case laws to support the contention that the Audit report filing requirement was procedural rather than mandatory.2. The Departmental Representative argued that sub-section (4) of section 80HHA explicitly mandated the filing of the Audit report along with the return. The representative highlighted the lack of bonafide conduct on the part of the assessee for repeated non-compliance with the filing requirement. The Tribunal differentiated the case from precedents cited by the assessee, emphasizing the clear language of the statute and the intention of the Legislature to make the filing mandatory.3. The Tribunal analyzed various statutory provisions, including section 12A(b) and the first proviso to section 43B, to demonstrate the distinction between procedural requirements and mandatory obligations. The Tribunal underscored the importance of adhering to statutory provisions without room for discretionary interpretation, especially when the language of the statute is unambiguous. Citing the decision of the Hon'ble Punjab & Haryana High Court, the Tribunal upheld the denial of deductions under section 80HHA due to the assessee's failure to file the Audit report along with the return, noting the absence of justifications for non-compliance.4. Ultimately, the Tribunal dismissed the appeal filed by the assessee, reiterating its adherence to the clear legislative intent behind the filing requirement of the Audit report under section 80HHA. The Tribunal emphasized that the assessee's habitual non-compliance and lack of justification warranted upholding the decisions of the lower authorities. The case law and precedents cited by the assessee were deemed inapplicable to the factual circumstances of the case, leading to the dismissal of the appeal.